NPRR568  Real-Time Reserve Price Adder Based on Operating Reserve Demand Curve

This NPRR requires ERCOT to implement an Operating Reserve Demand Curve (ORDC) in the Real-Time Market (RTM) to determine the Real-Time price adder for Real Time Settlement Point Prices. The Real-Time price adder reflects the price for reserves available in the ERCOT System based on the loss of Load probability at that reserve level. The addition of this price adder to the Real Time Settlement Point Price ensures that the Real Time Settlement Point Price reflects the opportunity cost of reserve scarcity. A new Other Binding Document, "Methodology for Implementing Operating Reserve Demand Curve (ORDC) to Calculate Real-Time Reserve Price Adder," a draft of which is attached to this NPRR as Attachment 1, will describe the methodologies for developing the ORDC and determining the reserve price adder using the ORDC. It will also list the values of the parameters to be used. Additional details about the methodology and a backcast based on the methodology can be found in filings under Public Utility Commission of Texas (PUCT) Docket No. 40000, Commission Proceeding to Ensure Resource Adequacy in Texas, and Key Documents posted on the Resource Adequacy Task Force home page . Since Real-Time co-optimization of energy and Ancillary Services will not be implemented at this time, to ensure that Resources are indifferent between providing energy and reserves in Real-Time, an Ancillary Service imbalance Settlement will be performed. Reliability Unit Commitment (RUC) Resources and Reliability Must-Run (RMR) Units are removed from this Ancillary Service imbalance payment for their On-Line capacity in Real-Time since making the payment and clawing it back would result in the same financial outcome but with significant changes to the Protocols.